Large-scale solar capacity will grow faster than wind for the first time in 2022, according to federal energy researchers.

About 16 gigawatts of solar generating capacity will go online in 2021 and an additional 17 GW is forecast for 2022, according to the Energy Information Administration’s latest Short-Term Energy Outlook. Small-scale solar capacity—installations of less than 1 megawatt usually located at the customer’s site—will grow by about 5 GW per year, mostly driven by residential accounts.

“Solar capacity growth in the forecast reflects various state and federal policies that support renewable energy,” the report said.

Wind capacity will grow by 17 GW in 2021, but its growth will slow to just 6 GW in 2022, mostly because of the expiration of a federal tax credit for production.

Overall, the share of generation from renewable sources will increase from 20% in 2020 to 21% in 2021 and 23% in 2022, mainly because of new solar and wind capacity, the agency said. Together, the share of generation from wind and solar will reach 15% by 2022 compared to 11% in 2020, EIA said. Meanwhile, the current drought in the West is resulting in the lowest share of generation for hydropower (6.5%) since 2015.

After reaching a monthly average of $5.35 per million British thermal units (MMBtu) in February due to extreme weather conditions, the Henry Hub natural gas spot price will drop to an average of $3.22/MMBtu in the third and fourth quarters of 2021, the report said.

In 2022, EIA forecasts Henry Hub prices will then fall to an average of $3.00/MMBtu.

Electricity consumption is going up as social distancing guidelines ease and more Americans receive COVID-19 vaccinations, the report said. Increased economic activity is expected to drive up retail sales by 2.8% this year and 1% next year.

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